Bandar Industries Berhad of Malaysia manufactures sporting
equipment. One of the company’s products, a football helmet...
Free
90.2K
Verified Solution
Link Copied!
Question
Accounting
Bandar Industries Berhad of Malaysia manufactures sportingequipment. One of the company’s products, a football helmet for theNorth American market, requires a special plastic. During thequarter ending June 30, the company manufactured 3,700 helmets,using 2,368 kilograms of plastic. The plastic cost the company$17,997.
According to the standard costcard, each helmet should require 0.54 kilograms of plastic, at acost of $8.00 per kilogram.
Required:
1.
According to the standards, what cost for plastic should havebeen incurred to make 3,700 helmets? How much greater or less isthis than the cost that was incurred? (Round Standardkilograms of plastic per helmet to 2 decimal places.)
2.
Break down the difference computed in (1) above into a materialsprice variance and a materials quantity variance. (Roundyour actual materials price to two decimal places, and round yourfinal answers to the nearest whole dollar. Indicate the effect ofeach variance by selecting "F" for favorable, "U" for unfavorable,and "None" for no effect (i.e., zero variance).)
Answer & Explanation
Solved by verified expert
3.8 Ratings (586 Votes)
Working
1
Standard quantity allowed
0.54
x
3700
=
1998
kgs
2
Standard cost allowed
1998
x
$ 8.00
=
$ 15,984.00
Requirement 1:
Cost that should have been incurred = $ 15,984 Answer
Actual Cost = $ 17,997
Hence, The cost that should have been incurred is actually LESS
than actually incurred by $ 2013 Answer
Requirement 2
Material Price Variance
(
Standard
Rate
-
Actual
Rate
)
x
Actual
Quantity
(
$
8.00
-
$
7.60
)
x
2368
947
Variance
$
947.00
Favourable-F
Material Quantity
Variance
(
Standard
Quantity
-
Actual
Quantity
)
x
Standard
Rate
(
1998
-
2368
)
x
$
8.00
-2960
Variance
$
2,960.00
Unfavourable-U
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
